Case Studies
Saving money while saving the environment? Now that really is a win, win situation...
Now I am not normally one for corporate buzz words and phrases, never have I been one to suggest that everyone should think outside the box or look upon a decision as a no brainer however for once I am genuinely stuck with one of these, normally quite irritating, phrases in my mind. When it comes to examining the Governments ECA approval scheme it really is a win, win situation for everyone.
The Enhanced Capital Allowance scheme has been put in place by the Carbon Trust as an incentive to companies who want to actively lower their energy usage and carbon footprint, it provides up front tax relief for companies who invest in energy-efficient equipment.
Before going into anything in any more detail let’s get the figures out the way first as they certainly make interesting reading. If you were in any doubt before about the scheme being a worthwhile cause then these will certainly help change your mind.
| Standard Capital Allowance | Enhanced Capital Allowance | |
|---|---|---|
| Equipment costs (incl. Installation and commissioning) | £10,000 | £10,000 |
| % of expenditure to which allowance applies | 20% | 100% |
| Electricity Supply Amp | 13 | 13 |
| Taxable amount reduced by | £10,000 x 20% = £2000 | £10,000 x 100% = £10,000 |
| First year saving on taxable profits: (corporation tax at 28%) | 28% of £2000 = £560 | 28% of £10,000 = £2800 |
| Second year saving | 28% Corp. Tax on 20% of the remaining amount of £8000 = £448 | £0 |
| Third year saving | 28% Corp. Tax on 20% of the remaining amount of £6400 = £358.40 | £0 |
| Fourth year saving | 28% Corp. Tax on 20% of the remaining amount of £5120 = £286.72 | £0 |
| Fifth year saving | 28% Corp. Tax on 20% of the remaining amount of £4096 = £229.35 | £0 |
| Total saving on taxable profit over 5 years | £1,882.50 | £2,800 |
| Difference in tax savings | £917.50 more saved on the ECA Scheme |
So to put that into perspective – If you spend £10,000 on ECA approved equipment you will see a first year saving on taxable profits of £2800. Add to that the fact that you are going to be saving at least 20% on your energy bills too and you can see why this scheme has got MD’s and Finance Departments up and down the country rubbing their hands together.
The regular scheme would see you wait five years for your full savings, and even then you would only have received £1882.50 in total – that’s £917.50 less than the first year ECA saving.
Here at Capital Cooling we are the first UK manufacturer to have a refrigeration product placed on this approved list – the Troy Multi Deck.
The Troy is the Capital Cooling flagship product. Designed by our in house Research and Development department it delivers maximum merchandising impact while also greatly increasing energy efficiency and of course offering increased tax relief through the ECA scheme.
Available in a wide range of sizes from one meter through to two and a half meters the Troy has a large merchandising window at 1590mm and features five fully adjustable shelves plus the base for maximum capacity. Like all Capital Cooling products the shelves are fully strengthened and come with EPOS strips and Perspex shelf risers as standard. Where the Troy stands out from the crowd is in the refrigeration system at the heart of the unit. The horizontal scroll compressor and self evaporating condensate system are extremely efficient and are controlled with a fully programmable digital temperature controller – which can also be linked up to a multi unit control system if required.
The Troy 26 has a RRP of £6596 and when the ECA is applied (based on Corporate Tax of 28%) to this you will see a saving of £1846 on your investment in the first year. In these tough times that sort of saving has certainly not to be sniffed at!
After reading this article the question in your head should not be “What is the benefit of the ECA to my company” but “Why would I even consider buying anything which is not part of this scheme?”
To find out more about the Troy or to purchase online please visit our online shop